The Clinton Surplus Myth...

Discussion in 'Budget & Taxes' started by onalandline, Aug 22, 2012.

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  1. Meta777

    Meta777 Moderator Staff Member

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    Thanks.


    Guess I'll just have to take your word for that.



    I agree.


    See, the problem with that is, like you, I am not a subscriber to the Laffer Curve Theory,
    (or at least, not as how it is general characterized as a, as you put it, smooth parabolic,)
    and have no intention of using the Laffer Curve to predict what will happen to revenues.

    -Meta
     
  2. squidward

    squidward Well-Known Member

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    That's my point, you cannot use the Laffer curve, because the Laffer curve is an undefined theoretical construct. THe real relationship is a complex, multivariable system.
    Until one can define our exact position on this multidimensional plot, one cannot predict the result of tax increases.

    But others on this board however, including the one that was actually asked to provide the relationship, consistently give the foolish, fixed, two dimensional relationship of R=ER * I , asserting that revenues increase when rates increase.
     
  3. Iriemon

    Iriemon Well-Known Member Past Donor

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    You consistently confuse the relationship between taxes and revenues with the effect of changes in tax policies on income, which you've never been able to prove.

    Revenues are simply a function of the percent of gross national income that is collected in taxes, i.e. the effective tax rate. Increase the effective tax rate and the revenues increase for any given level of gross income.

    I know conservatives hate to admit the obvious fact that increasing the effective tax rate increases revenues, because they like to play this silly game and pretend that raising taxes would have no effect on increasing revenues. That is why they invented supply side and laffer curve and the rest of the bull(*)(*)(*)(*) nonsense.

    If you want to claim that an increase in the effective tax rate has some effect on the economy or gross income, I'm eager to see it. As I have been for years. And like all the times in the past, I'm guessing you'll boot it with some smarmy comment.
     
  4. DivineComedy

    DivineComedy Well-Known Member

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    I have watched Iriemon debate on Debate Politics for years, he was then and still is in my opinion a "consummate gentleman," a phrase used on DP. I am 100% certain that he has had more than fourth grade math.

    I figure "increasing the effective tax rate increases revenues" is false at some point if those that make investments in jobs sit on their wealth, thereby losing increased revenue producing jobs. That there is a point where the system simply stagnates to surviving, kind of like China before Nixon, or France before Jefferson said, "Another means of silently lessening the inequality of property is to exempt all from taxation below a certain point, and to tax the higher portions of property in geometrical progression as they rise." That there is a point where any growth is born out of shear desperation of greater sweat or new technology or revolution (such as was inevitible with what Jefferson said):

    "I asked myself what could be the reason that so many should be permitted to beg who are willing to work, in a country where there is a very considerable proportion of uncultivated lands? These lands are kept idle mostly for the aske of game. It should seem then that it must be because of the enormous wealth of the proprietors which places them above attention to the increase of their revenues by permitting these lands to be laboured." (Thomas Jefferson to James Madison, 28 Oct. 1785) http://press-pubs.uchicago.edu/founders/documents/v1ch15s32.html

    I do not believe that Iriemon wishes to increase the taxes to the point of stagnation, that simply going higher to say Clinton levels would not be that detrimental, especially if there is any similarity to what Jefferson said:

    "The property of this country is absolutely concentered in a very few hands, having revenues of from half a million of guineas a year downwards. These employ the flower of the country as servants, some of them having as many as 200 domestics, not labouring. They employ also a great number of manufacturers, and tradesmen, and lastly the class of labouring husbandmen. But after all these comes the most numerous of all the classes, that is, the poor who cannot find work." (ibid)

    Our problem is not uncultivated lands "kept idle mostly for the aske of game" but appears to be uncultivated production, left idle due to lack of domestic investment in domestic production.
     
  5. Iriemon

    Iriemon Well-Known Member Past Donor

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    Perhaps you cannot read. I never said you claimed there was a predictable effect. But feel free to keep making up your own strawman for me.

    No it's not. It's a measurement of the sum off all income. Sorry you're so ignorant.

    Perhaps you cannot read. I said nothing about the Laffer curve.

    Again, your reading comprehension skills are non-evident. I never claimed you said there was a predictable effect. Thank you for proving me point.

    Maybe that 4th grade math course would help you.
     
  6. OldManOnFire

    OldManOnFire Well-Known Member

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    You are failing when you try to make a very complex scenario into a simple wave of the political wand!

    Your federal government today CANNOT enforce tax laws much less creating a scenario in which tens of millions are creating tax fraud!

    In the USA we have lots of stupid laws in place that have never had the funding to allow proper enforcement. The IRS is the same problem and when you give reason for 100-150 million Americans to find more ways to cheat and lie about taxable income, it becomes impossible to enforce...no matter if the fines are a million$...
     
  7. Dan40

    Dan40 New Member

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    In my lifetime we have passed into law about 4 million laws in the USA. Laws don't solve problems. Correcting problems solves problems. That's one of the advantages of business experience. Businessmen cannot pass laws, when there is a problem, we must identify it, break it down and find a solution. Sometimes the problem to be solved, IS a law.
     
  8. squidward

    squidward Well-Known Member

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    you are correct. My apologies. You said something much more ridiculous.
    There is nothing to "prove". Revenues and income are directly proportional through the equation R=ER * I. The effect of tax rates on one will effect the other.
    You however do have to prove that the product ER*I will be greater with an increasing tax rate, something which you have never been able to prove, yet consistently maintain.

    Income is not a complex multivariable function ?

    for your enlightenment, complex functions do give measurable results.
    You can measure the results in retrospect, but you cannot predict them if you don't know the function, which you do not.




    really ? What's are the words highlighted in red ?
     
  9. Iriemon

    Iriemon Well-Known Member Past Donor

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    It is not ridiculous at all. It is completely accurate.

    Amazing. It the same breathe you call my statement "ridiculous" you confirm it is accurate. Here you are saying that tax rates will affect income. Describe the effect you claim exists and prove it.

    It is mathematically proven by the formula you just gave. I don't know how much simpler it could be. Where you mentioning something about forth graders? I think they could grasp it.
    Resorting once again to crass dishonesty as you seemingly must to make a point?

    Here for the record is Squidward's statement to which I responded "No it's not. It's a measurement of the sum off all income.":

    "any level of gross income" is a defined by a complex multivariable system, which you cannot describe.

    Which everyone can see is far different from the question you pose now.

    You claimed that you cannot describe any level of gross income. That is what I denied. You can certainly describe gross income and measure it.

    Just as I said. Proving your prior question was dishonest.

    You are the one claiming to there is an effect, which you've never been able to prove.

    An ambiguous theory conservatives use to justify lower taxes on billionaires.
     
  10. Shiva_TD

    Shiva_TD Progressive Libertarian Past Donor

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    There is a fundamental flaw with this line of reasoning and that is, for the most part, those with wealth do not invest in the capitalization of enterprise. Overwhelmingly they merely purchase ownership of existing corporations through stock acquisition and that doesn't provide any capital to the enterprise for expansion. Only IPO's from a corporation provide capital to the enterprise and IPO's are a very small part of the stock market.

    Additionally the wealthy spread their wealth over international markets where growth is far greater (i.e. investments in China have a higher return on investment than is typical in the US).

    The entire "trickle-down" economic policy is fundamentally a fraud because the vast wealth created goes to the wealthy and not to enterprise. About 70% of the US GDP is based upon consumption and investments in the ownership of existing corporations is not consumption nor does it produce jobs. The same wealth going to the middle class increases consumption and that drives job creation.
     
  11. Iriemon

    Iriemon Well-Known Member Past Donor

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    How so?

    Sure it could.


    So your argument seems to be because the IRS does not police the laws perfectly we should just eliminate taxes on billionaires?

    I suppose you would argue we should just get rid of cops too. They CANNOT enforce laws either.

    I certainly agree we need to get rid of the stupid laws that are in place. However, we first need to remove the obstructionist Part of Grover Norquist that is dedicated to keeping them in place.
     
  12. Iriemon

    Iriemon Well-Known Member Past Donor

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    If they even do that. At least investing in stocks would lower the cost of capital and increase wealth of other investors.

    It is even worse. In a recession, at precisely the time the stock markets need support and the economy needs more spending, they pull their money out and hoard it in their offshore accounts were it does nothing but create deflation at the worst time.

    We need to increase the income of the great engine of spending, the middle class. We don't need more pandering to the 1%.
     
  13. squidward

    squidward Well-Known Member

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    Of course there will be an effect. You can't predict what the effect will be. You can only measure it in retrospect.
    The only ridiculous statement is by you, claiming that revenues necessarily increase as a result of increased tax rates.



    Sure complex functions give measurable results. They can be measured in retrospect. I just told you that.
    You cannot describe the system, and cannot predict what the results will be.


    You can use sophomoric phrases like "for any given level of income", but you cannot predict what "any level" will be, which renders your little buzz phrase useless.


    No, you claimed there was an increasing effect.
    I claimed you cannot predict the effect.
    You lose again.


    is this the theory you "said nothing of" ?
     
  14. Iriemon

    Iriemon Well-Known Member Past Donor

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    You claim there is an effect but you cannot describe what it is or prove it.

    And you claim my statement is ridiculous.


    Imagine that .

    Then how can you say there is an effect?

    I don't need to predict it.

    My position is and always has been what you just stated, which is that a higher effective tax rate will produce more revenues for any given level of gross income.

    As to the effect of taxes, I have demonstrated in other posts that there is no positive correlation over time between tax rates and economic performance. This suggests that tax rates in the range we have had them has not significant effect on gross income.

    You claim there is an effect, although you can't even say what it is and offer no proof.

    Ridiculous.

    LOL, when all other arguments have been proved ridiculous, resort to the classic self serving statement of victory. Congratulations! LOL
     
  15. squidward

    squidward Well-Known Member

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    I suppose your'e right, there will be no effect. Income will not change one penny. How silly to think so.




    unless there is zero dollar change, the most asinine assumption ever made, there will be an effect



    But you did, you said revenues would increase



    no kidding. Too bad you have no means to say what level of income will be generated.


    "suggests" is not mathematically sound.

    I claim there is an indeterminate effect. Please stop your lying.
    .
     
  16. Iriemon

    Iriemon Well-Known Member Past Donor

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    I didn't say one way or the other. You're the one who made the claim.

    I made no assumption. I simply pointed out the logical inconsistency of your positions, affirmatively claiming that taxes will have an effect of incomes, and then saying "You cannot describe the system, and cannot predict what the results will be."

    You cannot "describe the system" but claim there will be an effect on it by raising taxes. If you cannot even "describe the system" you obviously have no basis for your statement that taxes affect incomes.

    Hence, my "ridiculous" statement that you can't prove your position is spot on.

    For any given level of income, revenues will increase if the effective tax rate is increased.

    Neither do you.

    But I don't need to.

    Of course. But it is a basis upon which to make a conclusion.

    I did not lie at all. I never said you claimed there was an "inderminate" effect. Please stop your lying.

    I said "You claim there is an effect ..."

    and here is your statement making that claim: "Revenues and income are directly proportional through the equation R=ER * I. The effect of tax rates on one will effect the other."
     
  17. squidward

    squidward Well-Known Member

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    perhaps the most useless bit of information you have ever typed
     
  18. Iriemon

    Iriemon Well-Known Member Past Donor

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    Thanks for sharing your opinion. I disagree. Not only is it 100% accurate, but something conservatives simply refuse to acknowledge.
     
  19. squidward

    squidward Well-Known Member

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    It is accurate.
    Useless, but accurate.

    Now if you could predict what the "level of income" would be, you'd be on to something intelligent, but you can't and you're not.
     
  20. Iriemon

    Iriemon Well-Known Member Past Donor

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    Why do you need to predict the level of income for it to be useful?
     
  21. squidward

    squidward Well-Known Member

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    because if you can't predict it, you can't assume what the resulting change in revenue will be.
    Is this difficult ?
     
  22. Iriemon

    Iriemon Well-Known Member Past Donor

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    Because, unless you can demonstrate that a reasonable increase in the tax rates results in marginally greater negative consequences on the economy, something you've never been able to describe, much less prove, then it doesn't matter how the economy does, because however it does and the resulting gross national income, revenues will be higher with a higher effective tax rate than they would be with a lower one.
     
  23. squidward

    squidward Well-Known Member

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    Because unless you can demonstrate that under current conditions a tax increase won't result in a marginally greater negative consequence on the economy, you can't logically make the assertion, despite the fact that you did.

    I made no assertion other than to say that the results are unpredictable. You on the other hand made a definitive prediction.


    The FED ads $40 billion per month minimum to the economy just to keep it from imploding, and you think tax increases will help. True comic genius.
     
  24. DivineComedy

    DivineComedy Well-Known Member

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    I think it really depends upon what you consider to be wealth.

    Certainly if the stock does not wish to remain chaste the initial offering after you have taken it for a ride is going to produce the greatest wealth. Just passing the stock around, as if it can never get better with age, is just shuffling binders of stock.

    Granted, if the stock wishes to remain chaste the greatest potential profit from prostituting the stock is lost.

    If you have any considerable capital assets like some slave booty that your right hand possesses, you probably might want to check your binders for your worst-performing stocks, and sell before the taxes on capital gains go up in the second coming.

    The truth is if buy a slave girl (that the Prophet’s right hand possessed and he has used it and unloaded the laggard from his portfolio), you now have an asset, it might not be a brand new shiny back-ho, but if it was unloaded due to tax-motivated selling it might be a better deal than you think. According to “PanKaj Patel, a quantitative strategist at Credit Suisse” in an Orlando Sentinel Reuters’ article by David Randall on page B8 “…this wave of selling, which overlaps with tax-loss harvesting, can make these stocks undervalued, setting the stage for a rally through the end of January.”

    The very fact someone is buying the slave girls from the Prophet’s worst-performing stocks of slave girls means the Prophet is providing capital to the Prophet’s slaver enterprise.

    Say you take five of your worst slave girls, and sell them for a loss, but then use that capital to purchase one of great beauty. You have to consider that to the ones who bought your leavings, to them that booty is of greater beauty than their normal pickings. At one time you thought the stock was promising, to the smaller investor in war booty the stock probably looks to them to have the same potential as you saw in it.
     
  25. Iriemon

    Iriemon Well-Known Member Past Donor

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    To the contrary, my statement is completely logical.

    Why would you suppose that a tax increase would result in a marginally greater negative consequence on the economy?

    What definite prediction are you referring to?


    The FED ads $40 billion per month minimum to the economy just to keep it from imploding, and you think tax increases will help. True comic genius.[/QUOTE]
     
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